NEW YORK ( TheStreet) -- Friday's all-important May jobs report is coming close to being a referendum on the recovery.

Since the much weaker than expected ADP employment report on Wednesday, economists and analysts have scrambled to bring down expectations for the Bureau of Labor Statistics' release, and the feeling is the market has now largely priced in a weak showing.

That's all well and good from a trading standpoint, and Friday may very well produce a bounce for equities, even if nonfarm payrolls disappoints. The trick there will be not falling too far short of the mark. But looking further out, the Dow Jones Industrial Average is set up for its fifth straight weekly decline (It will take a gain of nearly 200 points on Friday to avoid it), and those who've enjoyed the rally since last summer have to getting nervous about what happens when QE2 wraps up at the end of this month, as the rally in bonds seems to attest.

The consensus for the May nonfarm payrolls number, due at 8:30 a.m. ET, is for an increase of 169,000 jobs, but sees a less healthy 140,000 number. The unemployment rate is seen sitting at 9.1%. Expect more parsing of the numbers inside the numbers in the commentary that follows the report as the reads on average workweek and hourly earnings get more face time than usual in the interests of spin.

A much worse than anticipated report (think below 100K) and the big picture starts to look pretty bleak amid the ongoing squabbling about the debt ceiling, and Moody's warning on Thursday about the vulnerability of the federal government's triple-A credit rating. (Moody's also expressed trepidation about the big banks on Thursday, saying it's reviewing the ratings of Bank of America ( BAC), Citigroup ( C), and Wells Fargo ( WFC) to account for doubts about future government support. All three stocks shrugged off the warning and rose in Thursday's regular session).

Interestingly, the American Association of Individual Investors' survey for the week ended on Wednesday has been released and it shows a marked decline in bearishness, although it's debatable how many respondents took into account the bruising selling on Wednesday.

The survey of the organization's roughly 150,000 members found 33.4% identifying themselves as bearish about stocks for the next six months, down eight percentage points from last week, but still elevated above a long-term average of 30%. The bullish box was checked by 30.2% of respondents, up 4.6 percentage points but still well below a long-term average of 39%. The neutral camp got more crowded as well, coming in at 36.4%, up 3.4 percentage points, and above a long-term average of 31%.

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